Art . 120 of D .L . no . 24 of 19 May 2020

COMMUNICATION FOR THETAX CREDIT TO ADAPTWORK ENVIRONMENTS

Businesses, artists and professionals,

that operate in places that are open

to the public, i.e., only the ones listed

in the specific list based on the

ATECO 2007 classification, and

associations and foundations and

other private entities including third-

sector entities, are eligible for a tax

credit for works and investments

needed to comply with health

requirements and measures to

contain the spread of the Covid-19.

In this paper is about terms for

communication and how to use the

tax credit.

EDITED BY OUR TAX TEAM

JULY 2020

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accounting, tax or other professional advisory services. The contents are intended for general information purposes

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The theoretical tax credit is equal to 60%of eligible costs incurred in 2020 [1] with a

cap of €80.000. This cap refers to eligible

costs and therefore the tax credit cannot

exceed €48.000.

A tax credit is recognised toonly the businesses listed inthe specific list based on theATECO 2007 classification

(see Annex 1 tothis Newsletter at pg.5), and

associations and foundationsand other private entities

including third-sector entities,for works and investments

needed to comply with healthrequirements and measures to

contain the spread of theCovid-19.

[1] To determine “costs incurred in 2020” artists and professionals and noncommercial entities need to refer

to the cash basis of accounting and therefore to the date of actual payment, regardless of the date when

works or investments, to which the payments refer, started. Sole proprietorships, companies, commercial

entities and non-commercial entities applying ordinary accounting policies need to refer to the accrual

basis of accounting and therefore costs accrued in the tax year in progress on 31 December 2020, regardless

of both the date when works were started and the payment date.

COMMUNICATION

Amount of eligible costs incurred up to the month prior to the date thecommunication is signed; and   

Amount of costs that the taxpayer expects to incur after such date and until 31December 2020.

Eligible works, meaning works necessary to comply with health requirements and

measures to contain the spread of the virus. These include construction works to

renovate changing rooms and canteens, to carve out medical areas, entrances and

common spaces, and for the purchase of safety furniture and furnishings, as well as

construction works functional to reopen or resume business (without prejudice to

compliance with zoning and construction regulations).

Eligible investments, i.e., investments connected to innovative activities. These

include investments for the development and purchase of equipment and

technologies to carry out working operations and for the purchase of equipment to

take the temperature of employees and guests and visitors. For example, this

category includes software programs, videoconferencing systems, secure connection

systems, and investments needed to allow employees to do smart working.

To be eligible for the tax credit, the “Communication of costs incurred to adapt workenvironments and/or their sanitization and for the purchase of protection equipment”containing the data listed below, needs to be filed through the Revenue Agency’s

website:

1.

2.

 

The Communication may be filed from 20 July to 30 November 2021. If it is filed after

31 December 2020, only eligible costs incurred in 2020 may be reported. In this period,

taxpayers may file a new Communication, which supersedes the previous one, or a full

waiver ofthe previously filed credit.

 

In the 5 days following filing of the Communication, in the reserved area of the

Revenue Agency’s website, a receipt will be available confirming that the

communication is being processed or has been rejected and explaining the relevant

reasons.

Costs that are eligible for the tax credit are:

Such works must be required by laws or regulations or guidelines to reopen

businesses developed by central government agencies, local authorities, trade

associations or professional associations.

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HOW TO USE THE TAX CREDITThe tax credit for costs actually incurred up to the maximum available cap may be used

only to settle by offsetting, under article 17 of Leg. Dec. no. 241 of 9 July 1997, any taxliabilities, starting from the business day following the successful receipt of theCommunication and in any case effective 1 January 2021 and up to 31 December2021. The Revenue Agency will set a specific tax code to use the credit to offset tax liabilities.

 

The recognized tax credit and its uses will have to be reported in section RU of theincome tax return for the tax period in progress on 31 December 2020.

Moreover, the tax credit may be assigned in full or in part up to 31 December 2021, toother parties, including banks and other financial intermediaries.  

The notice of assignment of the tax credit needs to be sent only by the assignor with the

functions made available on the reserved area of the Revenue Agency’s website.

This notice may be sent starting from 1 October 2020, or, if the Communication of

eligible costs in filed after 30 September 2020, starting from the business day aftersuccessful receipt of the Communication by the Revenue Agency.

The assignee is required to notify acceptance of the assigned credit by using the

functions made available in the reserved area of the Revenue Agency’s website.

The tax credit to adapt work environments is an element included in the calculationof income for the purposes of income taxes, and of revenues for the purposes of the

IRAP tax, according to the standard procedures for individual beneficiaries.

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Firm for any further explanation.

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ANNEX: LIST OF ELIGIBLE BUSINESSES